A client had a major problem in his business because one of his customers had filed for bankruptcy protection and owed my client several hundred thousand dollars in accounts receivables. My client also had several hundred thousand dollars of this customer’s inventory on hand in his warehouse. When my client was notified that his customer had filed bankruptcy, he immediately called his attorney to get advice as to how to handle this problem. It really was a problem because this bankrupt customer was about 25% of his total annual sales and his company was marginally profitable at the time.
I had just been engaged as a turn-around consultant with this client and he basically turned over the whole problem to my firm. The first thing we did was read all the notifications from the bankruptcy courts, reviewed the financial statements to make sure that we knew exactly what the accurate accounts receivable and inventory totals were and then we called my client’s attorney.
In a very short period of time, we became aware that my client’s attorney was a very good “real estate” attorney, but a very poor attorney when it can to this specific area of the law, bankruptcy, actually “Creditor Bankruptcy.” This attorney should have never took on this type of work for my client because he knew nothing about creditor bankruptcy law and the fate of this transaction really affected the health of my client’s business.
NEVER HIRE AN ATTORNEY OUTSIDE OF HIS FIELD OF EXPERTISE! Michael Jordan was a great basketball player, but if I was going to hire a middle linebacker to play for the Philadelphia Eagles, I would not hire Michael Jordan. Michael was a very talented athlete, but he would get killed on the football field with those highly trained athletes! My client’s attorney may have been a very talented attorney inside a real estate transaction, but he would have been killed (as would have my client with his representation) in this bankruptcy transaction.
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